Asian Currencies Decline on Japan Export Slump, Europe Outlook

Asian currencies weakened as the sharpest decline in Japanese exports in more than a year heightened concern that Europe’s debt crisis is sapping demand for regional goods.

Thailand’s baht slipped for a third day and South Korea’s won retreated from near a one-year high after data today showed shipments from Japan contracted 10.3 percent in September from a year earlier. Asian equities fell after European leaders attending an Oct. 18-19 summit in Brussels failed to provide clarity on financial aid for Spain, while Prime Minister Mariano Rajoy said he doesn’t feel under any pressure to seek a bailout.

“Japan’s export numbers add to the gloom,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “The market is going to be rather wobbly.”

The baht fell 0.1 percent to 30.75 per dollar as of 3:33 p.m. in Bangkok, according to data compiled by Bloomberg. The won weakened 0.1 percent to 1,104.25, Taiwan’s dollar dropped 0.1 percent to NT$29.320 and Indonesia’s rupiah declined for a third day, losing 0.1 percent to 9,600.

The drop in Japanese exports was the steepest since May 2011 and was bigger than the median forecast in a Bloomberg News survey of economists for a 9.9 percent decline. Thailand reports overseas sales data this week, while South Korea is due to release third-quarter gross domestic product numbers and the Philippines will review interest rates.

Stocks Fall

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s most-active currencies, was little changed. Its 60-day historical volatility fell to 2.34 percent from 2.37 percent on Oct. 19. The MSCI Asia Pacific Index (MXAPJ) of shares dropped 0.3 percent, following a 1.7 percent slide in the S&P 500 Index of U.S. stocks on Oct. 19 that was the biggest in four months.

“With disappointments over the European summit, and U.S. stocks falling on weak housing data, the won is facing downward pressure,” said Jeon Seung Ji, a currency analyst at Samsung Futures Inc. in Seoul. There is “resistance” to won strength after the currency touched 1,102.50 per dollar on Oct. 17, the highest level since October 2011, she said.

The baht dropped before a government report on Oct. 24 that may show Thai exports contracted 3 percent in September from a year earlier, a fourth monthly decline, according to a Bloomberg News survey of economists. Official data on Oct. 19 showed foreign direct investment in China shrank for a fourth month.

Elsewhere, China’s yuan was little changed at 6.2547 per dollar. Malaysia’s ringgit and the Philippine peso were steady at 3.0548 and 41.397, respectively. Vietnam’s dong fell 0.1 percent to 20,853, while India’s rupee gained 0.3 percent to 53.6637.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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